October is meant to have a feel of normality, but this is not the case for 2020. We have seen much higher rejection rates by carriers as they have more choice across the country for freight volumes that continue to be extremely above normal, and we have seen shippers having to reject more rates as well due to very high market rates that have gone beyond any form of reality that the market can handle.
Even though we have seen much higher than normal out of season rates, there seems to be a much more of a stable market in October, and a slight fall in some areas. How far this fall will continue until end of October and then beginning of November where holiday season freight starts to kick in is still to be seen.
Looking at Van vs Reefer, Van rates seem to be slowly coming down a few points as Reefers seem to be falling a little bit stronger, as Reefers are a little more volatile with a little less volume in the market overall, but the amount of volumes remains extremely high with a lot of volume still being shown across the country.
Many carriers are also not fulfilling their contracts as they are able to make a lot more money on the spot market as that demand has grown beyond anyone’s expectations.
There is nothing to show us that the market is shifting significantly, there is a very small down trend period, but there is no indication that the market is going to fall, it’s more like a slight stall before it rises again for the holiday period.
We are seeing some of the largest market decreases in some of the main markets in the United States, such as Los Angeles and Fresno, CA, Elizabeth, NJ, Ontario, CA, Allentown and Philadelphia, PA, and Cleveland and Columbus, OH. So we are seeing some of the largest markets in the United States cooling, but they are still extremely active and rates are still extremely elevated, and overall the data is showing all markets across the country as active and stable.
Carriers are generally abandoning the smaller markets and heading towards the larger markets, where freight rates remain strong, hence creating further capacity crunch in the smaller markets also, causing further rises in their rates.
As larger shippers are reorganizing their supply chains to meet the holiday season demand, carriers continue to be in a strong position. Volumes still remain at very high levels even though we did see a small maybe 5% drop since the beginning of this month, with a steady trickle down.
Some of the drop could be due to carriers renegotiating their contract rates causing freight load volumes to weaken slightly on the spot marekt. Over all capacity is still extremely tight, so the market continue to have high freight volumes and very tight capacity, we see rates will continue to be high.
As we continue to see the public spend less on services and more on products and goods such as grocery, clothing, furniture and home improvements all being up on last year this continued demand is keeping the freight market extremely busy.
With holiday season coming up fast, and even though we are without a second stimulus package, consumer confidence index remains high and is not faltering, so we feel the holiday season will be tight for shippers and carriers.
While we still have the pandemic with us, we are at a reflection point about the freight market and its future and how it will develop post pandemic.
Make sure you contact us if you need any assistance with moving your freight. Simply send us the freight requirements and we will do our best to find you the capacity that you need.
Thank you so much for being with us today, have a wonderful day, and stay safe.